# 2. Key concepts

<figure><img src="/files/tvqckfezdQVo1A6WFPvJ" alt=""><figcaption></figcaption></figure>

A decentralised, open source platform on the Ethereum blockchain, that allows users to generate HGBP by leveraging RWA as collateral where approved by HocDao Governance. Governance will soon be conducted by a community of users around the world, that holds the HOC Governance Token.

<figure><img src="/files/BSqSH1tEeuDTO5kppwGq" alt=""><figcaption></figcaption></figure>

The entity dedicated to starting and supporting the Hoc Protocol and its ecosystem – through to and past the point of decentralisation.

<figure><img src="/files/SmhYi49SM9mf4vjWuHOX" alt=""><figcaption></figcaption></figure>

A decentralised, unbiased, stable RWA-as-collateral backed stablecoin, soft-pegged to GBP.

**Interaction of these concepts**

The Hoc Foundation is committed to pursuing a decentralised, community-led approach to governance and operation of the Hoc Protocol. Once decentralised, HOC Token Holders will takeover from the Foundation to manage the Hoc Protocol and the financial risks of HGBP (with the help of innovative safety machinery to ensure its stability, transparency, and efficiency. Voting weight will be proportional to the amount of HOC Tokens owned.

**HGBP**

A decentralised, unbiased, Real World Asset backed stablecoin, held in cryptocurrency wallets or within platforms, and supported primarily on the Ethereum blockchain (ERC20).

<figure><img src="/files/Rjg49LdvecmoCoEgZvSn" alt=""><figcaption><p>Figure 1</p></figcaption></figure>

Thus, we have designed HGBP to carry 3 main functions:

1. A store of value
2. A medium of exchange
3. A unit of account

Once generated, bought, or received, HGBP can be used in the same manner as any other cryptocurrency: it can be sent to others, used as payments for goods and services, and even held as savings through a feature of the Hoc Protocol called the HGBP Staking Rate (HSR)

Our model dictates that every HGBP unit in circulation is directly supported by excess RWA collateral, meaning that the value of the RWA collateral is higher than the value of the HGBP credit lines in existence.

The quality of this collateral is very important, as 'RWA' is of course a very broad term. Thus the Foundation has committed to the following initial parameters for RWA collateral:

| Type        | Criteria                                                                                                                               |
| ----------- | -------------------------------------------------------------------------------------------------------------------------------------- |
| Location    | Prime Central London                                                                                                                   |
| Type of RWA | residential 'Buy to Let'with high rental demand                                                                                        |
| Debt        | There can be no existing debt/charges against this property                                                                            |
| Valuation   | A third party valuation by a RICS chartered surveyor is needed (to be renewed yearly for as long as the NFT is locked in the protocol) |

The above criteria gives the best chance of delivering as stable a collateral pool as possible - with the assets being easily disposable in the event of a default.

Once a User holds HGBP, they have a number of options:

1. Stake it back in to the HoC Protocol, in order to earn rewards in HGBP, together with rewards in HOC.
2. Use it to interact with the broader digital asset market, for example by buying Bitcoin and Ethereum
3. Utilise further decentralised finance applications
4. Convert it to GBP, in order to buy real goods, services and property
5. Send it to anyone who holds a wallet - any where in the world&#x20;

It is crucial to make clear, that point 4, our ultimate goal would be to see HGBP itself being accepted as means of payment, instead of having to rely on GBP to facilitate any transaction.&#x20;


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